These U.S. States Charge Electric Car Fees To Make Up For Lost Gas Tax Revenue

The topic of electric car contribution to the upkeep of roadways is back at the US Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) website. The site lists 11 states that introduced EV fees for the purpose of maintaining roads.

Some of those 11 states already split the fees for different versions of the plug-in cars or even include hybrid models.

Annual fees in those 11 states vary from $43 to $300, but most are up to $100.

“The maintenance of our highways has traditionally been funded from a combination of Federal and state taxes collected at the pump from the sale of motor fuels. Because electric vehicles (EVs) do not refuel at pumps that collect state and Federal fuel taxes, they do not contribute to the upkeep of the highways. This has caused many states to rethink how funds are collected to support the highway infrastructure.

Eleven states currently assess fees on electric vehicle owners in lieu of traditional fuel taxes. Georgia has the highest annual fee of the states that have currently enacted fees for electric vehicles. Commercial and noncommercial plug-in electric vehicles (PEV) have different fees in Georgia. Idaho is the only state that has a fee for conventional hybrid electric vehicles (without a plug). Washington State has enacted new fees that will become effective July 1, 2016.”

Annual State Fees for Electric Vehicle Owners as of September 2015

Annual State Fees for Electric Vehicle Owners as of September 2015 (source: energy.gov)

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77 Comments on "These U.S. States Charge Electric Car Fees To Make Up For Lost Gas Tax Revenue"

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miggy

Just increase the tax on petrol /gas to pay for this for the next ten years

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3 years ago

Alaa

That is a good idea. I didn’t think of that.

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3 years ago

Waiting

Where’s the equity in charging someone $300 a year for gas taxes that they may never would have paid if they drove and ICE. For the past four years I have driven my ICE 9,125 miles a year. At 19 MPG, that’s 480.26 gallons of gas. Arizona has an .18 cent per gallon gas tax. That means I have paid $86.45 annually for gas tax. Even an arbitrary tax value of $100 would be over charging me for what I would have paid if driving an ICE.

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3 years ago

Zim

The $300 is for a commercial vehicle so comparing that to the 84$ in gas taxes you’d have paid for your personal vehicle isn’t an apples to apples comparison.

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3 years ago

zzzzzzzzzz

Commercial doesn’t mean it must drive a lot. Non-commercial would be $200. This is more than 10,000 miles/year 33 mpg = 300 gallons of fuel would generate in 26% state tax.

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3 years ago

BraveLilToaster

That’s exactly what British Columbia is doing. We have a revenue-neutral carbon tax that does nothing but fund a break in income tax. The more revenue we (as a province) get in gas taxes, the less we pay in income tax.

People who drive EVs and heat their homes with electricity get to see the most benefit, of course.

And it’s working too. Our economy grew over the past couple years, yet carbon emissions are down. Businesses are becoming more efficient or are switching to other fuel sources.

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3 years ago

Alaa

Anything over $100 a year is unreasonable.

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3 years ago

sven

No it’s not. States are also getting short changed because EVs don’t pay the 18.4 cents per gallon federal excise tax on gasoline. Federal highway funds are allocated to states partially based on how much federal gas tax is collected in each state. If less federal gas tax is collected by a state it negatively affects what that state is entitled to receive in Federal Highway Funds. Also, since the Federal Highway Fund is underfunded, the federal government pays out more in funding than it collects in federal gas taxes.

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3 years ago

Robb Stark

It is extremely unreasonable given the externalities of ICEv vs PEVs.

Reasonable State governments should simply increase the gas tax to make up for shortfalls in tax revenue until increasing the tax rate does not result in higher tax revenue. We are a long way from that point.

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3 years ago

sven

You talk as if there are no externalities form electricity generated from coal power plants, fracked natural gas power plants. Do they not pollute? Do they not cause environmental harm? Do they not adversely affect people’s health?

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3 years ago

Three Electrics

Agreed; there should be a tax on carbon and taxes on pollution.

Separately, roads should either be paid for via registration taxes, or pay per use GPS.

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3 years ago

Anti Lord Kelvin

Sadly, what I am seeing is that as plug-in cars are “new in the town”, states have been very fast in creating these fees, some of them very high ones. However, carbon and nox pollution have been here for a long time with so few taxes on them, at least very little ones in regard of all the problems they generate.

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3 years ago

Drake

And it has been proven time and time again that these sources of pollution never surpass that of producing and burning gasoline.

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3 years ago

sven

You can’t be that naive, can you?. It sounds like you never lived next to a coal mine or a coal power-generating plant. Feel free to take a swim at the coal mine’s tailings retention pond or the coal power plant’s coal ash retention pond. Feel free to drink the water from nearby contaminated wells. Likewise, go to a fracking site and drink the water from nearby wells or swim in a lake or stream where fracking wastewater was illegally dumped. Afterwards, tell you how you feel.

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3 years ago

JeffP

Natural Resources Defense Council and the Electric Power Research Institute have investigated the emissions impact of EVs versus gasoline vehicles while taking into account the emissions from the power plants which supply electricity to the EVs. Their conclusion was “The potential reductions here are significant,” said David Hawkins, director of climate programs at NRDC. “Widespread transportation electrification should be a key part of the U.S. strategy to combat climate change and ensure a clean energy future.”
Full report can be accessed here: http://www.nrdc.org/media/2015/150917.asp

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3 years ago

Anti Lord Kelvin

You are right at the fact that coal (and oil) exploration as coal plants generate high pollution and have to be stopped. But all this pollution are local and can be avoid with consciousness behaviours, unlike tail pipe pollution that goes every where, as the engine oil spilling of ICE cars.
And remember that the coal plant that it’s near you could be producing electricity not for electric cars but well for oil refineries to make gas and diesel for ICE cars. Yes the electricity that is need to produce all the gas and diesel for the entire fleet of US car each year would be able to furbish enough electricity for 70 per cent of all car in US! One more thing, more than one third of plug-in car owners have solar panels and a lot of utilities will have to switch for cleaner energy suppliers or they will go bankrupt, as almost all the coal industry is already.

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3 years ago

super390

Global effects, Sven, global. For instance, no one’s attacked a country over coal since WW2. Oil and lack of oil are half the story of violent Middle Eastern politics, and foreign powers are getting drawn in more and more often, leading to the utter destruction of Iraq by the US, causing god knows what pollution effects. And worse is coming.

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3 years ago

sven

super390 said:
“For instance, no one’s attacked a country over coal since WW2.”

Wrong. Just flat out wrong.

Just last year Putin and Russia’a proxy army invaded eastern Ukraine and expropriated all of Ukraine’s coal mines, which were all located in eastern Ukraine. Now the European Union is forcing Ukraine as part of a financial help package to buy it’s own coal (mined in eastern Ukraine) from Russia, which purchased the coal from Russian-backed separatist’s currently in control of eastern Ukraine. Coal from eastern Ukraine is the soul source for the coal used by Ukraine to fuel it’s coal-fueled electric power plants and it’s steel mills.

Also, last year Putin and Russian army special forces invaded the Crimea area of Ukraine and expropriated for Russia the vast, newly discovered natural gas fields off the coast of Crimea.

China is also land filling submerged reefs to create artificial islands to claim territorial rights to all the South China Sea. This is a blatant land grab by China, an by coincidence the South China Seas have vast untapped deposits of natural gas.

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3 years ago

Priusmaniac

Let set this back straight. The US though that Russia would not react if it pushed Ukraine to join the west by having the CIA helping the extreme right movements make a violent revolution in Kiev. But the result was that Russia protected its Sebastopol base by organizing a referendum in Crimea to join back with Russia thereby avoiding NATO and the US from seizing it. In reaction the extreme right parties became even more extreme and started to make laws that ban the use of the Russian language even though it is the native language of most of the east and south Ukrainians. The result was the uprising of two east Ukrainian provinces. As Kiev send in tanks and soldiers instead of renouncing the new language ban laws, a conflict started that resulted in massacres. This resulted in the besieged east provinces to seek help from neighboring fellow Russian speaking Russians right on the other side of the border. Russia still feeling resentment from the CIA actions decided to let its border open to the Russian volunteers and even provided surplus weapons. This got the battles in a stall and resulted in Kiev negotiating at Minsk. The resulting plan… Read more »

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3 years ago

zzzzzzzzzz

Vow, Putler’s commie and chauvinist alliance is coming to take over EVs discussions :/ Your hands are long, comrade!

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3 years ago

Pushmi-Pullyu

sven said:

“You talk as if there are no externalities form electricity generated from coal power plants, fracked natural gas power plants. Do they not pollute?”

Aren’t you making a “Two wrongs make a right” argument here?

Okay, so if we lived in a world in which everything was actually fair, then there would be carbon taxes for coal-fired and natural-gas-fired power plants. More to the point, for discussion of the benefits of EVs, there would be carbon taxes for driving automobiles.

But we don’t live in that perfect world. We live in a world where low pump prices for gasoline are massively subsidized, using billions in tax dollars every single year, by using the U.S. military to protect our supply line of falsely “cheap” oil from the Mideast.

Suggesting that somehow this imbalance should be addressed by adding taxes to EV usage is not merely wrong, it’s ridiculous.

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3 years ago

Zim

Well from a state budgets perspective a negative externality of EV’s is lost road construction and repair revenue.

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3 years ago

Nick

Passenger vehicles don’t cause much damage, and thus shouldn’t pay much if anything.

If we’re going to subsidize freight we should do it with our eyes open and pass a direct tax for it.

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3 years ago

BraveLilToaster

They might not cause much damage to the roads, but they sure fuel a need for more road. Highway expansion is probably about half a state’s highway maintenance budget.

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3 years ago

Warren M

Do the math…less gas taxes because the cars use 25% less fuel than 10 yrs ago. The less than 1% that EVs represent. .pales in comparison to that 25% greater fuel efficiency.

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3 years ago

RexxSee

The new report pulls back the veil on the “users pay” myth, finding that: · Gas taxes and other fees paid by drivers now cover less than half of road construction and maintenance costs nationally – down from more than 70 percent in the 1960s – with the balance coming chiefly from income, sales and property taxes and other levies on general taxpayers. · General taxpayers at all levels of government now subsidize highway construction and maintenance to the tune of $69 billion per year – an amount exceeding the expenditure of general tax funds to support transit, bicycling, walking and passenger rail combined. · Regardless of how much they drive, the average American household bears an annual financial burden of more than $1,100 in taxes and indirect costs from driving – over and above any gas taxes or other fees they pay that are connected with driving. “The ‘users pay’ myth is deeply ingrained in U.S. transportation policy, shaping how billions of dollars in transportation funds are raised and spent each year,” said Tony Dutzik, co-author of the report and Senior Analyst at Frontier Group, a non-profit think tank. “More and more, though, all of us are bearing the cost of transportation in our… Read more »

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3 years ago

Mike616

When you elect Republican IDIOTS you get Idiotic policy.
EV’s aren’t even 1% of the population.
Catastrophic Global Warming is going to destroy most states, asset values far larger then the lost tax revenue.

States should be INCENTIVIZING the RAPID move to EV’s NOW.
Roads can be repaired by General Revenue, because roads benefit the Economic well being of Everyone in the State.

Letting a motivated group of Right Wing hate run your government is a sure ticket to State Financial Disaster.

Wisconsin being a prime example.
Texas only does better because it FEEDS off Exporting Pollution Energy, by destroying states like Ohio and Pennsylvania, taking the profits and leaving Toxic Waste Dumps.

It’s interesting that we have been paying subsidies to oil companies for decades; last year it exceeded $17,000,000,000. Even the former Bush administration suggest it be stopped; however, he could never get the Republicans to sign on.

This boondoggle no longer makes sense especially when we are trying to replace fossil fuels with clean energy. $17 billion would buy a lot of highway infrastructure without the need for creating penalties for buying EVs.

I think we should identify those politicians who continue to support this give-away so we can vote them out of office.

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3 years ago

Rightofthepeople

“Letting a motivated group of Right Wing hate run your government is a sure ticket to State Financial Disaster.”

Speaking of hate, try reading your own post.

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3 years ago

super390

Kansas and Wisconsin.

And when their jihad against government spending on “bad” Americans fails to turn deficits around, they re-elect the governors anyway. Maybe they just love the jihad for purely sadistic reasons, in the great American tradition of Jim Crow.

If I’m a hater for calling out someone else’s hate, then no political movement or government that’s ever existed can be called out for hate. Who benefits from this?

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3 years ago

Zim

Some of these states are “blue” states. Washington has two Dem US Senators, a Dem Governor and Lt Governor, and a Dem controlled State Senate. Maybe it’s a bit more complex than your Republicans-are-evil simplification.

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3 years ago

Mach1velli

Mixing toxic waste and CO2 in the same lot to make a point just shows how ignorant and emotional(irrational) you are about this subject.
There was an ice age that came and went way before the industrial revolution.

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7 months ago

Tim F.

Michigan is charging $100 for BEV and $30 for PHEV as of January 1, 2017.

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3 years ago

Anon

Michigan is actively anti-BEV (and anti-Solar) I suspect from a long history of conservatively entrenched ICE automakers and corrupt politicians under their thumb.

Last they want to do, is the right thing– by raising the taxes on gasoline.

Tax Carbon!

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3 years ago

BenBrown

Anti – BEV… we have had only 2 DC Quick chargers for the whole state, while neighboring states like Illinois has had over 20 just near Lake Shore Dr. alone.

We do need to pay something to keep the roads in repair. Mileage, weight and mpg (a type of carbon tax) sounds better to me. It doesn’t even have to be GPS, but could be done during license plate renewal with a visual check.

But…the flat $100.00 fee treats my Mitsubishi i-miev the same as a Tesla Model S, which we know, my car being far superior to a Model S should pay a different fee! 😉

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3 years ago

Phr3d

Seems like we could cover those fee losses pretty easily by lopping .0000001% off of the tax breaks we provide for FF exploration etc. and returning it to states based upon the number of EVs that no longer need those new oil supplies.
Georgia, ~10k EV x $200 is a Rounding error in tax breaks for FF exploration.

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3 years ago

SJC

All states should just leave it alone for the rest of this decade. When you start having millions on the road, then consider it.

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3 years ago

Ambulator

Everybody is fine with the gas tax. The more you drive, the more you pay. These flat fees go against that idea, and I think that is wrong.

If we had a mileage fee based on total miles driven, with a factor for the car’s weight, that could apply to all cars. The biggest difference is that you would still be charged for out of state driving, but I think that would be acceptable.

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3 years ago

Mart

Not so. The more fuel you burn, the more tax you pay. Two cars driving the same mileage per year will pay differing amounts of tax deoendant on their fuel economy. The increased fuel economy of a Toyota Prius reduces the tax stream more than EVs do, at the moment.

People prefer the fuel tax over a flat fee because they would rather be nickled and dimed than see one big bill. Vehicle weight causing road damage is certainly an issue for big trucks, but taxing by weight will also incentivize lighter vehicles. Lighter vehicles will be more fuel efficient, reducing fuel taxes taken in by the government.

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3 years ago

kdawg

How about a mutiplier? Each car gets a value based on how much CO2 it produces. Multiply that value by the miles driven and get a bill at the end of the year.

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3 years ago

Anon

Logic has nothing to do with how Michigan runs itself.

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3 years ago

Taser54

Only if Families are taxed in a similar manner.

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3 years ago

Ambulator

Vehicle weight is a substitute for mileage, and it is a better one. Any, say, 3000 pound car should pay the same for road usage.

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3 years ago

Waiting

That’s called vehicle registration tax and is already done in Arizona.

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3 years ago

Nick

A 3000 lbs car does negligible damage compared to a 30000 lbs truck.

The heavy vehicles do effectively all the damage to the road due to the fourth power law. They pay something like 20x more then the average vehicle, but they should be paying 1000x more to cover the damage they cause.

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3 years ago

super390

That might be a good thing if it eliminates the unsustainable truck-based freight networks that America has grown to depend on, and returns us to the rail-based network that once served us so well before the age of sprawl. Especially if we electrify all our freight rail, which we should have done long ago.

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3 years ago

Pushmi-Pullyu

I’d love to see that happen. And that’s a far more important issue than a relatively small road use tax on EVs, too.

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3 years ago

McKemie

Yes, all others here have missed the forest, seeing only the trees. Considered only minutia. Heavy truck traffic, ~40T, is responsible for essentially all road damage.

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3 years ago

Mart

Eliminate gas and diesel taxes, and charge all vehicles on the same annual scale.

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3 years ago

Nichen

I don’t think EVs should be taxed until 2017 or 2018 when it will be more mainstream.

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3 years ago

Epicurus

Has the Congress been stealing highway taxes to pay for other things? If so, that needs to change first.

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3 years ago

kdawg

Would that be highway robbery?

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3 years ago

Just_Chris

there is just no substitute for comic genius

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3 years ago

JeffP

No, Congress hasn’t taken money from the Highway Trust Fund to pay for other things, besides roads and mass transit. The root of the problem is that the gas tax has not increased on a per gallon basis since the 1980s. Meanwhile vehicles have become more efficient, so less tax is collected per mile driven, and inflation has caused the cost of road construction to climb. Net result is a gaping deficit in the Highway Trust Fund.

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3 years ago

Just_Chris

mass transit, now there’s an idea that would make things a bit easier to swallow. Increase EV and ICE tax to pay for electric buses, I could handle that.

I find this whole debate a bit difficult, no one likes to pay tax but we all have to make a contribution to keep things moving. The problem as I see it (as a complete outsider) is that the amount of fuel being consumed is going down and the absolute amount paid in tax is a fixed number per gallon.

Unless road building magically becomes much cheaper then this will come unstuck very soon. EV taxes are a very small sticking plaster on a very big crack in the dam wall.

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3 years ago

Stephen

Bummed that my Volt missed out on the WA sales tax exemption because it had a gas engine, but have to pay $150 because it has a battery.

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3 years ago

super390

That’s a good point. PHEV buyers (who will become much more common with the new Volts on sale) should sue their states on the grounds that these taxes are unfair because they pay gas taxes when they use gas, but get hit by the EV tax regardless.

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3 years ago

John in AA

One thing that people saying “well, I admit it’s only fair…” should keep in mind is that most (all?) states use registration fees as part of their road funding, that EVs tend to be more expensive than ICEs and therefore pay more registration, and that therefore the net revenue from the average EV is *more* than the average ICE, even absent a gas tax substitute. (I’ve seen this documented, sorry no reference close to hand.)

Makes it hard to see EV taxes as anything other than petty culture war.

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3 years ago

Nix

We’re in a period of legislative backlash against anything green. And it is only going to get worse now that the President just made a major international climate accord.

Just at the beginning of this month, pieces of legislation have been put through the Congress to roll back green legislation.

All of the advances we’ve made in the last decade in green energy and vehicles are actively being targeted for rollback, by a hundreds of state and federal bills.

This isn’t a conspiracy. It is an open and organized full frontal assault.

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3 years ago

super390

The ideological core of America’s right-wing movement, which has been around nearly 50 years, rejects the very idea of public goods. Including your right to clean air, water and soil. So while they tell their tribal bigot followers that environmentalism is a scam, what they tell each other at their country clubs is that all their followers, workers, and fellow citizens are inferior beasts of burden, who pay the price of cancer, emphysema, contamination, flooding, drought, and disinformation for the right to work for them in the same way that an ox pays its master for the right to drag a plow. They are amassing staggering amounts of wealth this way and will have no compunction about abandoning this country for places they haven’t ruined yet, or continuing to run it as rival barons over a Talibanized wasteland. Without redistribution of wealth, this has been the normal fate of private property systems for 3000 years.

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3 years ago

Mike

Yup.

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3 years ago

jdbob

According to the Oregon DMV website the annual registration for PHEV and BEV passenger vehicles is $43, the same as regular passenger vehicles. So I don’t see that there is a special tax.

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3 years ago

Mike

The fees/taxes to offset costs for maintaining roads should be collected based on usage, not the fuels used to operate vehicles. As fuel economy improves in ICE vehicles, and more are replaced with EVs, the current tax system will not work. The dependence on road taxes based on gas consumption creates perverse incentives for states to encourage gas guzzling vehicles and more miles driven.
Many states have mandatory annual vehicle inspections, and odometer readings are collected. The vehicle tax bill could be based on vehicle weight and miles driven, the two factors directly related to wear on roads.

Yep. For states with no annual inspection, the odometer could also be self-reported at registration time, with a stiff penalty to make misreporting unprofitable.

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3 years ago

Leaf Owner

GA leading the way!

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3 years ago

Leaf Owner

Oh – and when my lease is up on my Leaf (in GA) I will be moving back to a high mileage gas car as that has now become the most economical thing to drive (sadly)

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3 years ago

Jonathan

I find it totally insane that a state will give a tax credit or rebate on the purchase of an EV and then charge a use tax on it afterward?! You just gave people money and now you’re asking for it back?! Just don’t give the money in the first place morons!

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3 years ago

Pushmi-Pullyu

Typical bureaucratic inefficiency. Sadly, that’s nothing unusual, and it’s an example of why governments and bureaucracies tend to get more inefficient over time.

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3 years ago

Vinny

They also charge electric motorcycles this fee. Somehow I don’t think my 450 pound Zero SR causes much road damage compared to four wheeled vehicles on the road and definitely reduces traffic and parking congestion.

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3 years ago

David D. Nelson

I’m in the same boat, possibly worse, because my Gizmo was designed to go up to 40mph and is thus over the 35mph design limit I have to pay the road tax, too. This is an in-town commuter vehicle so it gets on average only about 2500 miles/year. I pay more per mile in road tax than my 14mpg full-size pickup! Reporting annual mileage and paying based on a weight formula would make the most sense to me.

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3 years ago

Vinny

David,

My Ford Ranger gets about 17 MPG and I figured out roughly that I spend $100.00 in road taxes in 6,000 miles. So that would be the break even point with my Zero SR. But so far I have over 21,000 miles on my 2014 SR. I have a 60-70 mile round trip commute and the Zero is perfect for it.

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3 years ago

ModernMarvelFan

I am confused by the Washington tax.

$150 for PEVs with more than 30 miles of range.
$100 for PHEV with more than 30 miles of AER.

So, which one does Volt fall under? Volt is technically both. I am sure owners want the lower one when the state wants the higher one.

Isn’t PEVs with 30 miles range the same as PHEV with 30 miles of range?

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3 years ago

Loboc

A PEV with only 30mi range would probably be an NEV. No way you could do much highway travel with only 30mi range.

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3 years ago

Mach1velli

Wow, you guys are like broken needles(missing the point). Arguing about ICE vs EV taxes. 100% of taxes come from “we the people”.
Regardless of how they take your money they will in some way take your money to fill an ever expanding budget. No, a tax on freight wont allieviate it because all businesses pass on taxes to the consumer(you). The problem though isnt the cost of road maintenance but the ever expanding list of entitlements.
The current state of the roads isnt because there isnt enough $ to maintain them in the current paradigm, but the money keeps getting diverted to other things by politicians seeking to have giveaways for reelection and that is the problem.

And CO2 isnt “pollution”. But if you think it is then feel free to stop releasing it. 😉